If the Keynesian AD shortfall is $425 billion and MPC is 0.86, calculate the size of the desired tax cut needed: a. $48.7 billion b. $69.2 billion c. $83.3 billion d. $92.6 billion e. $116.1 billion
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- If the AD shortfall is $800 billion and the MPC is 0.8,a) How large is the desired fiscal stimulus?b) How large an income tax cut is needed?c) Alternatively, how much more government spending would achieve the target?If the AD shortfall is $700 billion and the MPC is 0.95,(a) How large is the desired fiscal stimulus? Please enter the answer in billions, whole numbers only.If the AD excess is $400 billion and the MPC is 0.9,a) How much fiscal restraint is desired?b) By how much do income taxes have to be increased to get that restraint?
- If the AD excess is $300 billion and the MPC is 0.75, Instructions: Enter your responses as whole numbers. a. How much fiscal restraint is desired? $ |billion b. By how much do income taxes have to be increased to get that restraint? 2$ |billion c. Alternatively, how much should government reduce its spending to achieve the target? 2$ billionAccording to the Keynesian model, if a country experiences a recessionary gap of $100 billion and the MPC is .8, which of the following do we need to get back to full employment? An increase in government spending of $500 billion. O An increase in government spending of $20 billion. An increase in government taxation of $400 billion. A decrease in government taxation of $400 billion. A decrease in government spending of $80 billion.If the AD excess is $300 billion and the MPC is 0.75. Instructions: Round your responses to one decimal place. a. how much fiscal restraint is desired? billion b. by how much do income taxes have to be increased to get that restraint? billion c. alternatively, how much should government reduce its spending to achieve the target? billion
- If the MPC is 0.80 and the government increases transfer payments by $45 billion, then the initial fiscal stimulus will equal $225 billion $56.25 billion $36 billion $9 billionIf the AD excess is $100 billion and the MPC is 0.5 Instructions: Enter your responses as whole numbers. (a) How much fiscal restraint is desired? $ billion (b) By how much do income taxes have to be increased to get that restraint? $ billionIf the MPC is 0.95, how much will taxes need to be cut to cause AD to increase by $200 million? None of these answers $5 million $10 million $20 million
- In the Keynesian-cross model, if the MPC equals 0.75, then a $3 billion decrease in taxes increases planned expenditures by and increases the equilibrium level of income by $3 billion; $9 billion $2.25 billion; $9 billion $2.25 billion; $2.25 billion $3 billion; $3 billionHow much government spending needs to be increased by to maintain full employment in the economy If the economy was facing recessionary gap of $2,000 billions? Assume MPC is .75? How much tax cut should government give if they wanted to eliminate this recessionary gap through tax cut?An inflationary gap is the amount by which aggregate expenditures ____ the amount required to achieve full-employment equilibrium GDP. A) exceed B) equal C) fall short of D) are greater than.
